Council of Mortgage Lenders report suggests borrowers are looking for security for mortgage payments
Fixed-rate loans became more popular in April suggesting borrowers are looking for security over future mortgage payments, according to the Council of Mortgage Lenders latest report.
The proportion of borrowers taking out fixed-rate schemes jumped by 5% in just one month to 59%, the highest increase since December 2007.
The report found that the average first-time buyer put down a deposit of 13% in April, which is the highest level in over three years.
First-time buyers typically took out loans for 3.3 times their income, down from 3.35 in March.
Michael Coogan, CML director general, said: “Monthly house purchase lending volumes continue to be lower than last year’s levels and there will be a further weakening in coming months as recent approvals data has shown.
“The squeeze on mortgage funding has led many lenders to tighten their lending criteria. While tighter criteria make it more difficult for some borrowers to obtain a mortgage, they also reduce risk in a slower housing market.
“There has been a resurgence of fixed-rate lending as borrowers are seeking certainty. This trend is likely to continue as the anticipation of future bank base rate cuts has diminished.”